While confirming the move, RC Mathur, the executive director of BSE, explained that this was the first time when the exchange has got the prima-facie evidence against the broker. ``We are glad that we had the 20 time gross exposure limit which checked the transactions executed by the broker. The broker's terminal was immediately deactivated and was asked to square off his positions.''

According to Mathur, the broker had a purchase order of 30,000 shares, to be executed in the higher price band of the day. However, the broker punched in an order of 3 lakh shares at Rs 725 which inevitably formed thehighest bid for the day. It should be noted that at this point of time, about 11.46 am, the price prevailing on the exchange was an average Rs 709.

``Our investigations would offcourse centre around how the broker could have made the mistake both in case of quantity and price,'' Mathur added. It is interesting to note that the BOLT system, by default, allows the trader to check the deal punched in and only then executes the order.

Mathur also explained that the gross exposure limit in case of Shah allowed his trading system to absorb a purchase order of only 1.30 lakh shares. The remaining part of the net quantity of 3 lakh shares however could not be matched as the system first provided the alert signals to the broker and later deactivated him from the system.

It is also learnt that the broker was immediately called upon by the senior officials of the exchange and asked for an explanation. On the broker's plea that the transaction was erroneously punched, the exchange offered him the concession tosquare off his position.

Market observers explained that the stock shot up from Rs 681 at 11.35 am to a high of Rs 710 within a few minutes, but the single deal of 3 lakh shares alarmed the market, since it was executed at a hefty premium of Rs 15 to the market price. The error helped the market record an unrealistic price of Rs 725 on both the local bourses.